A Trustee in Ohio plays an incredibly important role in ensuring your wishes for an established Trust Fund are carried out, so understanding the scope of their responsibilities is critical to naming the right person for this role. The following blog explores the obligations of the Trustee of a Trust Fund in further detail and why it’s important to connect with a Medina County, Ohio Trust preparation lawyer who can help you navigate this process to ensure your documents are valid and in good hands.

What A Trustee Does in Ohio

A Trustee is the individual legally appointed to manage and oversee a trust according to the terms and conditions included by the creator of the Trust (known as the Settlor) when it is established, and Ohio estate law. Upon assuming this role, Trustees have a fiduciary duty. This is essentially a legal obligation to act in good faith, adhere to the directions of the Fund, and protect the assets held in the Trust. These responsibilities are outlined in Section 5801.04 of the Ohio Trust Code.

Core Legal Duties of a Trustee

  • Must adhere to the terms and conditions of the Trust in accordance with the Settlor’s instructions
  • Must act in the best interest of the Beneficiaries, as Trustees cannot put their own interest before that of the Beneficiaries
  • Must manage the assets held in the Trust by making reasonable financial and investment decisions to grow assets when appropriate
  • Must keep accurate records of Trust transactions, including receipts, expenses, and distributions
  • Must remain impartial and act in an unbiased manner without preference to any one Beneficiary

Communication and Reporting Responsibilities

  • Must notify Beneficiaries within timelines and provide contact information
  • Must provide Trust copies to beneficiaries when requested
  • Must complete an annual Trustee report, which included detail trust property, liabilities, disbursement, and compensation information
  • Must respond in a prompt manner to requests for information from Beneficiaries

When Can a Trustee Be Held Liable in Ohio?

Because there are a number of legal requirements Trustees are expected to uphold, understanding what happens when a Trustee fails to act in the best interest of the trust is critical.

Common Examples of Breaches of Fiduciary Duty

  • Misusing funds or mixing Trust assets with personal money
  • Failing to adhere to the terms and conditions of the Trust
  • Failing to provide the required reports to Beneficiaries
  • Making decisions based on self-interest rather than in the best interests of the Beneficiaries

It’s important to understand that, if a dispute arises regarding the terms and conditions of the Trust or the actions of a Trustee, these matters will be handled through the Probate Division of the Medina County Court, or the county court where the dispute has arisen. In the event that the court finds that a Trustee has failed to uphold their duties, the court may intervene to remove or replace them from the position.

How to Choose the Right Trustee for an Ohio Trust

As you can see, there are many responsibilities a Trustee must adhere to, which highlights the importance of ensuring you choose the right person for this role. As this role requires legal, financial, and interpersonal skills, appointing the wrong person can lead to disputes and even legal challenges.

Legal Requirements of a Trustee

In general, anyone can serve as the Trustee of a Trust Fund so long as they:

  • Are at least 18 years old
  • Of sound mind

However, just because you can appoint virtually anyone to serve in this role does not mean you should. Choosing a Trustee requires careful consideration.

Traits of an Effective Trustee

  • Trustworthiness and Integrity: Because a Trustee is responsible for handling assets of a considerable value, they must have morals and act ethically as they make financial decision
  • Organization: As accurate recordkeeping and communication with Beneficiaries is required for this role, you should consider appointing someone who is highly organized
  • Understanding of Trust Administration: You may want to consider appointing someone who understands the importance of this process, the responsibilities required, and the timeline to help avoid errors and later disputes
  • Availability: Acting as a Trustee can be an incredibly time-consuming process, which is why appointing someone who has the capacity and bandwidth to serve in this role is critical

In addition, you should consider naming an alternate, in case the person you named cannot assume the role when it comes time. This ensures someone you are comfortable with can be the Trustee instead of letting the court decide.

Additional Trustee Powers and Considerations Under Ohio Law

As Trustees are granted additional powers, understanding these matters is critical to ensure the effective and efficient administration of the Trust you have established.

Statutory Powers of Trustees

  • Trustees are responsible for collecting and managing property held in the trust, including accepting or rejecting additions to the Fund
  • Trustees, when permitted by the terms and conditions of the Trust, may sell or buy assets for the Fund
  • When required, a Trustee may delegate duties to other agents while overseeing their actions

Contact Our Medina, Ohio Estate Planning Team Today

When you are ready to create a Trust, it’s in your best interest to connect with an experienced estate planning attorney for these matters. It can be overwhelming, and the last thing you want is to make an error that invalidates your plan, leaving your assets and Beneficiaries vulnerable. At Krause Law, our dedicated team can walk you through this process to help you achieve peace of mind. Connect with us today to learn how we can help you during these complex times.